Councilors regret Governor's statement on Caltex

Members of the Legislative Council of the Riau province (DPRD) have regretted Governor Saleh Djasit's statement that the Riau administration would no longer involve PT Caltex Pasific Indonesia (CPI) in the future operation of the Coastal Plan Pekanbaru (CPP) oil block.

H. Abdul Kadir Salim, the chairman of the commission IV of the council said in Pekanbaru on Friday that it was still too premature to talk about the future operator of the oil block.

He said that the appointment of a company to operate the oil block should be based on many aspects related to the financial viability of the company and its technology capability.

"I don't know why the governor looks down at Caltex and prefer a local company," he said. "This is certainly a big question for us," he added.

The Riau provincial governor has demanded Jakarta to take a full control of the oil block when its contract expired in August next year. The oil block, which produces about 80,000 barrels of crude oil per day is currently operated by Caltex under a production sharing contract with Pertamina,

The government has decided not to extend the contract and instead asked Pertamina and Caltex to form a joint venture to operate the oil block. Both companies demand to become majority shareholders in the joint venture until the House of Representatives (DPR) stepped in and asked Caltex to take a smaller stake if it wanted to be involved.

Minister of Mines and Energy Susilo Bambang Yudhoyono has said that Caltex has agreed to take a smaller stake and allowed Pertamina to become the majority shareholder.

He said that the government would give the opportunity to the Riau administration to be part of the joint venture to accommodate the Riau people's demand. But he said that the involvement of the province depended on its capability to provide funds. (*).